Electronics - August 2013
Transcript of Electronics - August 2013
-
7/29/2019 Electronics - August 2013
1/41
-
7/29/2019 Electronics - August 2013
2/41
-
7/29/2019 Electronics - August 2013
3/41
44
200
2012 2018E
DTH subscibers (million)
1
35
2010 2020E
Demand of LED products (in USD billions)
69.6
400
2012 2020E
Electronics demand ( in USD billions)
Source: Department of Electronics & Information Technology; KPMG
Notes: DTH - Direct-to-Home (satellite television broadcasting); CAGR - Compound Annual Growth Rate, LED - Light Emitting Diode
By 2020, the electronics market
in India is expected to increase
to USD400 billion from
USD69.6 billion currently
One of the largest growing
electronics market in the world
By 2020, the LED market in
India is expected to expand to
USD35 billion from USD1
billion currently
Promotion of LED products to
boost demand
By 2018, the number of DTH
subscribers in India is expected
to rise to 200 million from 44
million in 2012
Digitisation to drive growth in
DTH market
CAGR: 42.7%
CAGR: 28.7%
CAGR: 24.4%
-
7/29/2019 Electronics - August 2013
4/41
11
34
2010 2020E
Demand of telecom equipment (USD billions)
7.7
17.7
2012 2017ETelevision industry in India (USD billions)
9.9
70.0
2012 2020E
Semiconductor design market (USD billions)
Source: Department of Electronics & Information Technology; KPMG
Notes: CAGR Compound Annual Growth Rate
By 2020, the semiconductor
design market in India is
expected to increase to USD70
billion from USD9.9 billion in
2012
Rising demand and availability
of talent to boost growth in the
semiconductor design market
By 2017, the television industry
in India is expected to expand
to USD17.7 billion from USD7.7
billion in 2012
Worlds third-largest TV market
By 2020, demand for telecom
equipment in India is expected
to rise to USD34 billion from
USD11 billion in 2010
Rising teledensity in the country
is leading to higher demand fortelecom equipment
CAGR: 18.1%
CAGR: 11.1%
CAGR: 27.8%
-
7/29/2019 Electronics - August 2013
5/41
The engineering sector is delicensed;100 per cent FDI is allowed in thesector
Due to policy support, there wascumulative FDI of USD14.0 billion intothe sector over April 2000 February2012, making up 8.6 per cent of totalFDI into the country in that period
Growing demand
Source: Corporate Catalyst India; 2020E Estimate for calendar year 2020 by Department of Information Technology; Aranca Research
Notes: FDI Foreign Direct Investment; FY Indian Financial Year (AprilMarch); USD US dollar, EPCG Export Promotion Capital Goods Scheme;
EHTP Electronic Hardware Technology Park; SEZ Special Economic Zone; CAGR Compound Annual Growth Rate
Growing demand
Demand from households is set toaccelerate given rising disposableincomes, changing lifestyles, andeasier access to credit (includingcredit cards)
Government and corporate
spending will also contribute togrowth in demand
Attractive opportunities
The electronics market isexpected to expand at a CAGR of24.4 per cent during 200920
Intended reduction ingovernments import bill is likely toboost domestic electronics
manufacturers
Policy support
100 per cent FDI allowed in theelectronics hardware manufacturingsector under the automatic route
Duty relaxation and schemes suchas EPCG, EHTP and SEZs toprovide tax sops; duty exemption forequipment required for setting upsemiconductor plants
National Policy on Electronics(2012) and setting up of NationalElectronics Mission
Higher investments
Sector has attracted stronginvestments in the form of M&Asand other FDI inflows
Companies are set to augmentinvestments in production,distribution and R&D in the nextfew years
2009
Market size
USD45
billion
2020E
Market size
USD400
billion
Advantage
India
-
7/29/2019 Electronics - August 2013
6/41
Electronics
ConsumerElectronics
Mobile Phones
TVs
MusicSystems
IndustrialElectronics
UPS systems
SCADA
PLC
AC drivesystems
Computers
Notebooks
Desktops
Servers
Communicationand Broadcasting
Equipment
Direct-to-home(DTH)
Set Top Box(STB)
StrategicElectronics
Radars
Satellite basedcommunication
Internal SecuritySystem
DisasterManagement
System
ElectronicComponents
Semiconductordevices
Cathode raytubes
Capacitors
Picture Tubes
Source: Department of Information Technology (201011 Annual Report); Corporate Catalyst India; Aranca Research
Notes: SCADA Supervisory Control and Data Acquisition; PLC Programmable Logic Controller
-
7/29/2019 Electronics - August 2013
7/41
Source: Corporate Catalyst India; Aranca Research
Closed market
Development in
transistor radios,
black and white TVs,
calculators etc
Continuous and rapid
industry growth
Developments in colour
TVs
Advent of computersand telephone
exchanges in 1985,
followed by digital
exchanges in 1988
Sharp decline in
custom tariffs
Signing of WTO-FTA
agreement in 1997,
wherein India
committed to complete
elimination of all
custom duties on IT
Indian companies such as
Videocon, Moser Baer
and Onida gaining global
identity
Increasing penetration of
high-end electronics
products such as High
Definition TVs (HDTVs),
LCDs, LEDs, and tablet Approval of National
Policy on Electronics
(2012) and setting up of
National Electronics
Mission
Mandatory digitisation of
cable TVs by 2014
1965 to early
1980s
1984-1990
1991- 2005
Late 2000s
Introductory
stage
Golden period
Liberalisationera
Growth era
-
7/29/2019 Electronics - August 2013
8/41
14.6
21.0 21.2
23.4
28.329.9
32.7
FY07 FY08 FY09 FY10 FY11 FY12 FY13*
Value of electronics goods production in India
(USD billion)
Source: Department of Information Technology(201213 Annual Report); Aranca Research
Note: FY13* - Estimates
Total production of electronics goods in India is estimated to
reach at USD32.7 billion in FY13
Production expanded at a CAGR of 16.8 per cent during
FY0712 CAGR: 16.8%
-
7/29/2019 Electronics - August 2013
9/41
Shares in total production of electronic goods
(FY13*)
Source: Department of Information Technology
(201213 Annual Report); Aranca Research
Notes: C&B Communication and Broadcasting; * Estimates
According to government estimates, communication and
broadcasting equipment constituted 31 per cent (the highest
share) of total production of electronic goods in India in
FY13; consumer electronics had the next highest share of
23 per cent
Not surprisingly, computers are a key component of total
electronics output in India (14 per cent in FY13*); the
segments share is likely to go up over this decade, givengreater policy focus on encouraging computer hardware
manufacturing
23%
12%
14%
31%
5%
15%Consumer Electronics
Industrial Electronics
Computers
C & B equipment
Strategic Electronics
Components
-
7/29/2019 Electronics - August 2013
10/41
Comparison in production trends of C&B
equipment and the overall electronics sector in
India (USD billion)
Source: Department of Information Technology (201213 Annual Report);
Aranca Research
Notes: C&B Communication and Broadcasting;
FY13* Estimates, CAGR** - is for Total Electronics
Production (by value) of C&B equipment in India is
expected to expand at a CAGR of 33.9 per cent over FY07
13 (production in the segment is expected to reach
USD11.5 billion in FY13 from USD8.4 billion in FY12)
Growth in the segment is expected to far outpace the overall
growth of electronics goods production in the country
(CAGR of 17.9 per cent over the same period); given C&B
equipments large share in the electronics sector, itemerged as the key growth driver for the overall sector
13.817.6
20.3
23.1
26.8 29.9
37.0
23.9
5.5 6.5
7.4 8.411.5
FY07 FY08 FY09 FY10 FY11 FY12 FY13*
Total Electronics C & B equipment
Linear (Total Electronics) Linear (C & B equipment)
CAGR**: 17.9%
-
7/29/2019 Electronics - August 2013
11/41
Share of C&B equipment in electronics
production over FY0713*
Source: Department of Information Technology (201213 AnnualReport); Aranca Research
Notes: C&B Communication and Broadcasting; FY13* Estimates
Production value of all other segments in the electronics
sector (other than C&B equipment) grew at a rate of 12.7
per cent over FY07-12
With growth in C&B equipment far outpacing those in other
segments, the formers share in total electronics production
has doubled over FY0712 to 28.3 per cent and is
estimated to reach 31 per cent in FY13*
86%78% 73% 72% 73% 72% 69%
14%22% 27% 28% 27% 28% 31%
FY07 FY08 FY09 FY10 FY11 FY12 FY13*
Other Electronics C & B equipment
-
7/29/2019 Electronics - August 2013
12/41
Electronics exports from India (USD billion)
Source: Department of Information Technology (201213 Annual Report);
Electronics and Computer Software Export Promotion Council; ArancaResearch
Notes: C&B Communication and Broadcasting;
FY13* Estimates
Electronic exports from India is expected to reach USD8.3
billion in FY13*, over FY0712, exports from the sector
(CAGR: 27.9 per cent) have outpaced total production
(CAGR: 16.8 per cent)
Yet again, as in total production, growth in exports was led
by C&B equipment; electronic components was the other
key sub-segment
2.8
3.3
6.8
5.5
8.9 8.9 8.3
FY07 FY08 FY09 FY10 FY11 FY12 FY13*
CAGR: 27.9%
-
7/29/2019 Electronics - August 2013
13/41
Shares in electronics exports from India (FY11)
Source: Department of Information Technology (201011 Annual
Report); Aranca ResearchNotes: C&B Communication and Broadcasting
Exports of C&B equipment and components together
account for over 80 per cent of total electronics exports in
FY11
Exports for C&B equipment has increased at a CAGR of
86.8 per cent during FY07-11 (Highest among all segments)
followed by Strategic electronic components with a CAGR
of 25.8 per cent during same period
3.5%
11.1% 3.2%
36.6%
45.5%
Consumer Electronics
Industrial Electronics
Computers
C & B equipment
Strategic Electronics
-
7/29/2019 Electronics - August 2013
14/41
Source: Company Websites; Dataquest; Corporate Catalyst India; Aranca Research
Notes: DVD Digital Video Disc; AC Air Conditioner; TV Television; PC Personal Computer
Company Business description
Established to meet specialised needs of Indian defence services
Focuses on contract manufacturing, design and manufacturing services, software development and
quality assurance
Third largest consumer durables manufacturer in India after LG and Samsung Manufactures and markets TVs, DVD players, microwave ovens, refrigerators, washing machines, ACs
and power backup solutions
Market leader in consumer durables
Manufactures TVs, audio-visual solutions, computers, mobile phones, refrigerators, washing machines,
microwave ovens, vacuum cleaners and ACs
Second largest player in the consumer durables market after LG
Manufactures TVs, home theatre systems, DVD players, mobile phones, digital cameras and camcorders,refrigerators, ACs, washing machines, microwave ovens and computers
Leading IT hardware and software provider
Manufactures and markets PCs, PC servers, storage solutions, display products and other electronic
products
-
7/29/2019 Electronics - August 2013
15/41
Source: Company Websites; Dataquest; Corporate Catalyst India; Aranca Research
Notes: CRT Cathode Ray Tube; * This list is indicative
Company Business description
World's second-largest company in the optical storage media segment
Supplies products to a number of branded players such as Sony, Verbatim, TDK, Maxell, Imation and
Samsung
Also has a presence in the photovoltaic and home entertainment segments
Offers high-value, high-margin design services for mobile phones and telecom/networking software
Manufactures TV tuners, set top boxes, energy meters, networking cards
Offers state-of-the-art solutions for Frequency Control Products (FCP), Electronic Manufacturing Service
(EMS) and Hybrid Micro Circuits (HMC)
Acquired Celetronix, one of the largest electronic equipment manufacturers in India, in 2006
Offers printed circuit boards, enclosure integration, and distribution and repair services with in-region
design services support
Largest Indian integrated manufacturer of a wide range of display devices such as TV picture tubes, CRT
guns, heaters and cathodes, and deflection yokes
Operates a facility in Germany to manufacture high-tech, high-resolution CRTs for demanding applications
such as aircraft avionics and medical monitors
-
7/29/2019 Electronics - August 2013
16/41
Consumer Electronics Increased presence of organised retail and affordability due to technological advancement
Expansion into new segments such as HDTVs, tablets and smart phones
Colour TV is the largest contributor with total production of 14 million units
Industrial Electronics
Application of state-of-the-art systems such as SCADA, PLC and AC drive systems across
various sections of the industry
Expertise in conceptualising such systems and their erection and commissioning Acquisition of export orders through international competitive bidding
Computers
One of the fastest-growing IT systems and hardware market in Asia Pacific
Notebooks segment is estimated to have recorded a growth rate of 16 per cent in FY13*;tablet ownership increased from 8 per cent in 2010 to 12 per cent in 2011
Expansion of server market into smaller cities, and small and medium businesses
Source: Department of Information Technology (201112 Annual Report);Corporate Catalyst India; Accenture EHT Research; Aranca Research,
Note: FY13* - Estimates
-
7/29/2019 Electronics - August 2013
17/41
Strategic Electronics
Indias defence sector is poised for substantial growth; the country is expected to be one
of the top five markets for defence equipment by 2015
Economic growth and low costs are likely to provide impetus to aerospace market
Nuclear power to play a large role in Indias energy security needs
Electronic Components Semiconductors leading segmental growth
High growth in key determinants for electronic components, namely consumer electronics,
telecom, defence and IT verticals
C&B Equipments
Increasing telephone penetration due to falling tariffs in the worlds second most populous
country
Growing broadband subscriber base
DTH subscription grew to 44 million by end-2012 from 25 million in 2010 and is expected
to reach 200 million by 2018
Source: Department of Information Technology (201112 Annual Report); Corporate Catalyst India; Aranca ResearchNotes: C&B Communication and Broadcasting; DTH Direct-to-Home (Satellite Television Broadcasting)
-
7/29/2019 Electronics - August 2013
18/41
Source: Aranca Research
Notes: EHTP Electronic Hardware Technology Park; SEZ Special Economic Zone; FDI Foreign Direct Investment; R&D Research and Development
Policy supportStrong
government
support
Growing demand
InvitingResulting
in
Growing demand Increasing investmentsPolicy support
Higher real
disposableincomes, easy
consumer credit
Falling prices,
increasing
penetration
Growing
consumer and
industrial base
Setting up of
EHTPs, SEZs,favourable FDIclimate
Increasingliberalisation,
tariff relaxation
National Policy on
Electronics and
National Electronics
Mission
Expanding
production anddistribution
facilities in India
Increased R&D
activity
Providing support
to global projects
from India
-
7/29/2019 Electronics - August 2013
19/41
Rising per capita income in India (USD)
Source: IMF; Aranca Research
Increase in discretionary income and credit availability has
boosted demand for consumer durables
The government is one of the biggest consumers of the
sector and leads the corporate spend on electronics; this is
not surprising given that electronics facilitates e-
governance, developmental schemes and initiatives
launched by the government
Strong demand and favourable investment climate in the
sector are attracting investments in R&D as well as
manufacturing
-5%
0%
5%
10%
15%
20%
25%
30%
300
600
900
1,200
1,500
1,800
2,100
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011F
2012F
2013F
2014F
2015F
2016F
2017F
Gross domestic product per capita, current prices Growth
-
7/29/2019 Electronics - August 2013
20/41
Encouragement to FDI,
SEZs
100 per cent FDI is permitted in the electronics hardware manufacturing sector under the
automatic route
100 per cent income tax exemption to SEZ units on export profits for five years, 50 per
cent for the next five years
Government planning to setup dedicated clusters to promote manufacturing of electronic
products
Customs Duty
Relaxation
IT/Electronics sector is the first in India to be allowed complete customs exemption oncertain items used for manufacturing electronic goods
No customs duty on 217 tariff lines covered under the Information Technology Agreement
(ITA-1) of the WTO
Peak rate of basic customs duty is 10 per cent
Source: Department of Commerce, Government of India; Department of Information
Technology (201011 Annual Report); Aranca Research
Notes: FDI Foreign Direct Investment; SAD Special Additional Duty of Customs
Reduced Central Excise
Standard rate of excise duty (CENVAT) is 12 per cent
Microprocessors, hard disc drives, CD ROM drives, DVD drives/DVD writers, flash
memory sticks, and combo-drives have concessional excise duty of 6 per cent and are
exempt from SAD Components and accessories of mobile handsets are exempt from excise duty and SAD
-
7/29/2019 Electronics - August 2013
21/41
EPCG, EHTP Schemes EPCG allows import of electronic capital goods without paying any customs duty
EHTP provides benefits, such as duty waivers and tax incentives, to companies which
replace certain imports with local manufacturing
Intellectual Property
Rights
Intellectual Property Rights (IPR) are a key determinant of progress in R&D and innovation
in the electronics sector GOI has amended relevant IPR-related acts (like the Copyright Act, Trademark Act, New
Designs Act) from time to time to help spruce up innovation and new technologies in thesector
Source: Department of Commerce, Government of India; Department of Information Technology (201011 Annual Report); Aranca Research
Notes: EPCG Export Promotion Capital Goods Scheme; EHTP Electronic Hardware Technology Park Scheme;
IPR Intellectual Property Rights; GOI Government of India
-
7/29/2019 Electronics - August 2013
22/41
Favourable business
conditions
To create an ecosystem for a globally competitive electronic system design &
manufacturing sector and to achieve a turnover of about USD400 billion by 2020, including
investments of about USD100 billion, as well as to provide employment to around 28
million people at various levels
Focus on new
technologies
To build on the emerging chip design and embedded software industry for achieving
global leadership in Very Large Scale Integration (VLSI), chip design, and other frontiertechnical areas, and to achieve a turnover of USD55 billion by 2020
Source: Department of Information Technology; Aranca Research
Promote exports To increase export in the electronic system design & manufacturing sector from USD5.5
billion to USD80 billion by 2020
Improving supply chain
To build a strong supply chain of raw materials, parts, and electronic components for
raising the indigenous availability of these inputs from the current 2025 per cent to over60 per cent by 2020
Building competencies
To develop core competencies in strategic and core infrastructure sectors such as
telecommunications, automotive, avionics, industrial, medical, solar, information and
broadcasting, and railways
-
7/29/2019 Electronics - August 2013
23/41
Incentives provided by government to attract
investors
Source: Department of Information Technology; Aranca Research
Strategies
Favorableeco -
system
Promotingexports
Focus onHuman
resource
development
Developingand
mandatingelectronicsstandards;
Focus onstrategic
electronics
Focus oninnovation
and R&D
To provide subsidy of up to USD10 million per 100
acres of project in electronics manufacturing
clusters
Reimbursement of excise duties for capital
equipment in non-SEZ units
No central taxes and duties for 10 years in high-
tech facilities such as semiconductor fabricating
units
Various export incentives such as 25 per cent of
duty credit on exports of different products
Moreover, the government proposed an
Electronics Development Fund worth USD2 billion
to promote innovation, R&D, productcommercialisation, and nanoelectronics
-
7/29/2019 Electronics - August 2013
24/41
Source: Department of Industrial Policy and Promotion; Aranca Research
Notes: FDI Foreign Direct Investment; ** Includes computer software & hardware sector inflows, All figures are from April 2000
Cumulative FDI inflows into the electronics and computer hardware & software over April 2000January 2013 stood at
USD12.8 billion
Demand growth, supply advantages, and policy support have been instrumental in attracting FDI
Cumulative FDI inflows into the electronics sector
(USD billion)
Cumulative FDI inflows into electronics and IT
(combined)** (USD billion)
0.8 0.8
1.1 1.2 1.2
FY09 FY10 FY11 FY12 9MFY13
9.0 9.910.7
11.212.8
FY09 FY10 FY11 FY12 9MFY13
-
7/29/2019 Electronics - August 2013
25/41
Key Mergers and Acquisitions (M&A)
Source: Thomson One Banker; Grant Thornton;
CMIE Business Beacon; Aranca Research
The sector has witnessed over 12 M&A deals since 2010
Of the M&A deals in the sector since 2010, Crompton
Greaves acquisition of ZIV Group was the highest in terms
of value*Acquirer Target Deal date
Deal
value
(USD
million)
Centum
Electronics Ltd
Solectron
EMS India Ltd
29th July 2010 6.8
Shemaroo
Entertainment
Ltd
Vistaas Digital
Media Ltd
30th October
20105.1
Emerson
Electric Co
Fisher
Sanmar Ltd
31st March
2011135.0
Schneider Elec
India Pvt Ltd
Smartlink
Network
Systems
13th May 2011 113.0
Mitsubishi
Electric Corp
Messung
Group23rd Jan 2012 NA
Crompton
Greaves LtdZIV Group 27th July 2012 192.0
Notes: M&A Mergers and Acquisitions
* Out of the deals whose transaction amount was available
-
7/29/2019 Electronics - August 2013
26/41
Source: India Electronic News; Assorted News Articles; Aranca Research
Notes: R&D Research and Development
2010 2011
May 10: LG earmarks
around USD85.0
million for upgrading
Indian plants Sep 10: Haier invests
to open 75 new retail
stores (called
Experience Centres) in
India in 2010
Nov 10: Samsung
inaugurates USD75.0
million manufacturing
facility in Chennai
2012
Jan 11: SunEdisonallocates USD100.0million for installation of
30MW solar capacity in2011
Feb 11: Whirlpoolannounces USD25.0million investment inFY11
Apr 11: Hitachi allocatesUSD400.0 million to setup R&D centre inBangalore
Jun 11: BHEL and BEL
consortium allocatesUSD416.7 million to setup a solar photovoltaicmodules production unit
May 05: LG Electronicslaunches latest series ofCinema 3D Smart TVs
with marketing spend ofUSD20.8 million
Jan 17: Samsung toraise its investments toUSD41.4 billion forconsolidation in itsposition in mobile chipsand flat screens
Videocon plans to investaround USD12.5 millionin Research and
Development duringFY13
Oct 31: Sony to investUSD100 million inexpansion and marketing
2012- 2013
Nov 23: GE plans toinvest USD60 million by2015 in product
designing at itstechnology centre inBengaluru
Mar 13: Sony plans tospend USD62.5 million inpromoting its products
Mar 13: Reliance andVideocon are in talks toinvest USD5.2 billion to
set up a chipmanufacturing plant
-
7/29/2019 Electronics - August 2013
27/41
Source: Aranca Research
Notes: All figures as of 201112, BEL - Bharat Electronics Limited
WEST: Maharashtra and
Gujarat host
manufacturing units forBEL, Videocon and LG
EAST: West Bengal hosts
manufacturing units of
Videocon and Philips
SOUTH: Tamil Nadu and
Andhra Pradesh are hubs for
electronics manufacturing in
South India
NORTH: Delhi and Uttarakhand are
the main hubs for electronics
manufacturing in North India
Major Electronics Manufacturing Plant
-
7/29/2019 Electronics - August 2013
28/41
Salient features
Established in 1954 under the Ministry of Defence to
meet specialised needs of the Indian defence services
The company has a strong commitment to quality and
innovation, with two dedicated central research
laboratories
During FY12, R&D expenditure was 6.0 per cent of
total turnover
The company has nine manufacturing units; each unit
has its own Development and Engineering (D&E)
division
Revenues (USD millions)
Source: BEL Website; Annual Reports; Business Standard;
Aranca Research
859.6
1,009.0 998.4
1,092.7 1,200.2 1,177.6
600.7
FY07 FY08 FY09 FY10 FY11 FY12 9MFY13
-
7/29/2019 Electronics - August 2013
29/41
Key success factors
Focus on innovation and R&D
Key technological collaborations with leading
European, American and Israeli companies
Rising defence spending in India
Governmental emphasis on indigenisation and
reduction of import bill
Diversification in the civilian and export market
Source: BEL Website; Annual Reports; Aranca Research
Financial highlights
During FY07-12, BELs revenue increased at a CAGR
of 7.7 per cent (from USD859.6 million) to nearly
USD1.2 billion
During same period, BELs net profits increased at a
CAGR of 17.7 per cent (from USD74.1 million) to
USD157.6 million
-
7/29/2019 Electronics - August 2013
30/41
Market share in consumer durables (FY10)
Source: Company Website; ISM Capital; Aranca Research
Third largest consumer durables company in India and one
of the largest colour picture tube (CPT) manufacturers
globally
Holds about one-fourth market share in the consumer
durables market
Leads the market in colour TV, refrigerator, washing
machine, and microwave oven segments
25%
75%
Videocon
Others
-
7/29/2019 Electronics - August 2013
31/41
Top line and bottom line trends (USD million)
Source: Company Website; ISM Capital; Aranca ResearchNotes: * FY10 Data for 15 months;
9MFY12 Data for first 9 months of financial year 2012
During FY0711, Videocons revenues increased at a
CAGR of 11.1 per cent
By the end of the first nine months of FY12, the company's
revenues reached USD1886.2 million
Notes: FY Financial Year; CAGR Compound Annual Growth Rate
During 200709, the financial year was OctoberSeptember; however,from 2010, the financial year was changed to JanuaryDecember
1,923.6
2,513.9
2,043.8
3,220.5
2,694.9
1,886.2
188.7 231.4 87.3 157.1 119.7 24.0
FY07 FY08 FY09 FY10* FY11 9MFY12
Revenues Net Profits
-
7/29/2019 Electronics - August 2013
32/41
Strong presence in the
consumer electronics
market
Sales expanded at a
CAGR of 10.4 per cent
during FY0711
Market capitalisation ofUSD1436 million
Revenue base of over
USD2691 million,
with net profit of USD113
million
Primary focus on consumerelectronics products
Foray into manufacturingcompressors and motorsand crude oil business
Aggressive growth viaacquisitions and entry in
telecom, DTH, and mobilehandset manufacturing
Focus on R&D
Strong brand
presence in Tier 2
and Tier 3 cities
Foray into telecom
services and handset
manufacturing
Launched LCD TV
bundled with DTH
and Internet chip
198595 199505 200512
Plans to set up a
SEZ in Pune and
Aurangabad in
Maharashtra
Acquisitions
Thomson, Philips,
and Electrolux
plants
Source: Videocon Website; Aranca Research
Note: DTH Direct to Home
-
7/29/2019 Electronics - August 2013
33/41
Revenues (USD million)
Source: Micromax Website; Memorandum;
News Articles; Aranca Research
Micromax is the leader in the Indian tablet market, with an
18.4 per cent market share and second in smart phones
with 17.1 per cent share
With presence across 14 countries, the company
manufactures mobile handsets, tablets, and LED televisions
During FY0811, Micromaxs revenues increased at a
CAGR of 164.2 per cent to USD504 million in FY11
The companys share in the mobile handset market in India
increased from 5 per cent in 2011 to 6.6 percent in 2012
Analysts estimate the companys revenues to have
increased to USD583.3 million in FY12
27.172.8
333.7
504.0
583.3
FY08 FY09 FY10 FY11 FY12E
CAGR: 164.2%
-
7/29/2019 Electronics - August 2013
34/41
Source: Department of Information Technology; FY10, FY11 Annual Reports; Dataquest India; Aranca Research
Growing customer base: Market for electronics is expected to grow at a CAGR of 22.0 per
cent during the period 20092020. The demand for electronics hardware in India is projected to
increase from an estimated USD68 billion in 2011 to USD125 billion by 2014 and USD400
billion by 2020
Targeted reduction in import bill: Domestic electronic production accounts for around 45.0
per cent of the total market demand. Therefore, in order to reduce the import bill, the
government plans to boost the domestic manufacturing capabilities and is considering a
proposal to give preference to Indian electronic products in its purchases
Increasing penetration in the consumer durables segment: Consumer durables market in
India is characterised by low penetration in various product segments, viz. 1.0 percent in
microwaves, 3.0 per cent in ACs, 16.0 per cent in washing machines, 18.0 per cent in
refrigerators, etc. Higher disposable incomes are leading to realisation of penetration potential
in various product segments, especially in rural areas
Policy and investment support: To compliment the targeted reduction in import bill, the
government has proposed a minimum investment of USD555.0 million for semiconductor
manufacturing plants and USD222.0 million for ecosystem units. This is considered a major
step toward attracting foreign companies to set up manufacturing facilities in India
Growth in
Electronics
-
7/29/2019 Electronics - August 2013
35/41
Source: Department of Information Technology; KPMG; Aranca Research
147 million televisions in 2011 94 million cable TV homes 800 channels with 167 pay channels
Households with TVs inIndia
44
200
2012 2018EUnits (million)
The government announced the digitisation of cable
television in India in four phases, which would be completed
by the end of 2014
Digitisation will lead to complete switchover from analogue
cable to Digital Addressable Systems in a phased manner
The number of DTH subscribers in India is expected to
increase from 44 million currently to 200 million by 2018
174 million televisions in 2016 200 million DTH subscribers by 2018
DTH subscribers (million units)
CAGR: 28.7%
-
7/29/2019 Electronics - August 2013
36/41
Source: Department of Information Technology; KPMG; Aranca Research
The digitisation of cable television has led to increased demand for set-top boxes, dish, cables, and other electronic
component; this has resulted in many opportunities for local and foreign players to enter the market
Digitisation will lead to increased broadband penetration in India and open up new avenues for companies offering value-
added services such as online gaming, HD television Internet, music, and radio
Dish TV revenues (USD million) Sun TV revenues (USD million)
87.4
149.4
233.7
320.9
423.1
FY08 FY09 FY10 FY11 FY12
191.5 197.6
261.3
346.4
401.3
FY08 FY09 FY10 FY11 FY12
CAGR: 48.3% CAGR: 20.3%
-
7/29/2019 Electronics - August 2013
37/41
Electronics Industries Association of India (ELCINA)
ELCINA House, 422 Okhla Industrial Estate,
New Delhi 110 020, India
Phone: 91 11 26924597,26928053
Fax: 91 11 26923440
E-mail: [email protected]
Website: www.elcina.com/
Telecom Equipment Manufacturers Association (TEMA)
4th Floor, PHD House, Opp. Asian Village,
New Delhi 110 016, India
Tel: 91 11 26859621
Fax: 91 11 26859620
E-mail: [email protected]
Website: http://www.tfci.com/cni/tema.htm
-
7/29/2019 Electronics - August 2013
38/41
Manufacturers Association for Information Technology (MAIT)
4th Floor, PHD House, Opp. Asian Games Village,
New Delhi 110 016, India
Tel: 91 11 26855487
Fax: 91 11 26851321
E-mail: [email protected]
Website: www.mait.com
Consumer Electronics and Appliances Manufacturers Association
(CEAMA)
5th Floor, PHD House
4/2, Siri Institutional Area, August Kranti Marg
New Delhi-110 016
Telefax: 91- 11- 46070335, 46070336
e-mail: [email protected]
Website: www.ceama.in
-
7/29/2019 Electronics - August 2013
39/41
C&B: Communication and Broadcasting
CAGR: Compound Annual Growth Rate
Capex: Capital Expenditure
CENVAT: Central Value Added Tax
EHTP: Electronic Hardware Technology Park
EPCG: Export Promotion Capital Goods Scheme
FDI: Foreign Direct Investment
FY: Indian Financial Year (April March); for example FY10 means April 2009 March 2010
PLC: Programmable Logic Controller
R&D: Research and Development
SCADA: Supervisory Control and Data Acquisition
USD: US Dollar
Wherever applicable, numbers have been rounded off to the nearest whole number
-
7/29/2019 Electronics - August 2013
40/41
Year INR equivalent of one USD
2004-05 44.95
2005-06 44.28
2006-07 45.28
2007-08 40.24
2008-09 45.91
2009-10 47.41
2010-11 45.57
2011-12 47.94
2012-13 54.31
Exchange Rates (Fiscal Year)
Year INR equivalent of one USD
2005 45.55
2006 44.34
2007 39.45
2008 49.21
2009 46.76
2010 45.32
2011 45.64
2012 54.69
2013 54.45
Exchange Rates (Calendar Year)
Average for the year
-
7/29/2019 Electronics - August 2013
41/41
India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared
by Aranca in consultation with IBEF.
All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The
same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium
by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in
any manner communicated to any third party except with the written approval of IBEF.
This presentation is for information purposes only. While due care has been taken during the compilation of this
presentation to ensure that the information is accurate to the best of Aranca and IBEFs knowledge and belief, the
content is not to be construed in any manner whatsoever as a substitute for professional advice.
Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in
this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of
any reliance placed on this presentation.
Neither Aranca nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on
the part of the user due to any reliance placed or guidance taken from any portion of this presentation.